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ERICOPOLY
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Posts posted by ERICOPOLY
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Oh well, if the US is the best positioned, then the chance of a US recession is the same as the chance of a global recession.
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13 minutes ago, Parsad said:
The United States is an import country...not an export country. You will get a recession...a global recession...but it will be much more painful for the rest of the world than the U.S. The U.S. can now import at lower cost with a stronger dollar...inflation has an impact, but it will be less painful here...although the papers will cry bloody murder!
Yes, real asset prices are dropping...that's a good thing for those that were sitting on cash. There was also a lot of cash sitting on the sides held by institutions and investors. That will now be put to use as asset prices become more enticing. This is the end of a cheap credit cycle...one of the cheapest in global history. The excesses are now being wrung out of the system to make room for a much healthier system for the long-run.
The patient is now on a treadmill again...steak and lobster is off the menu! Cheers!
Costco food court is on the menu again.
I agree that the US is in the better position. I was wondering this afternoon what will happen in all the other economies where the consumers will be reset into higher mortgage rates. This won't hit the US where most people have 30 yr fixed rates. But everywhere else...
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Today I was reading that we just had our 2nd largest inflow from retail investors of 2022. That's not capitulation.
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1 minute ago, stahleyp said:
Eric, what percentage are you hedged?
I'm not hedged in my Roth IRA.
The puts are all in my margined taxable account.
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Well, a hurricane is indeed coming. Aside from that joke, my own consumer behavior is projecting doom for the us economy. The things that are souring my mood are the same things everyone is facing. Higher prices everywhere and for nearly everything.
So I have actually added to my SPY puts because we're still at that point where pundits are saying "50% recession risk" or whatnot. I'm thinking it's 100% but that's just me.
Home equity is dropping. Bond portfolios dropping. Equity portfolios dropping. Rents up. Food up. Energy up. Fuck all every other cost is up.
And that won't bring on a recession? Then nothing will.
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On 9/21/2022 at 7:49 AM, changegonnacome said:
Depends on the housing equity/debt math too.....did they buy in late 2021 in say Phoenix.......a $2m mortgage being inflated away against an equity base thats declined by 30%....still puts you in negative equity.
It's probably easier to see the benefit if we're talking about a fixed mortgage in an investment property and rents are going up with inflation and where the mortgage payment never changes. Ignoring what's going on with the equity, the cash flow is improving because of inflation. Homeowners also enjoy this imputed benefit although it's not as obvious.
And the equity base will recover if inflation persists because wage increases will follow.
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5 minutes ago, Gregmal said:
The conservatives rope them in and the liberals make them stay! J/K as honestly I have no clue really other than both parties are frauds on the subject
Keeping the strawberries cheap and issuing debt to fund social services. Government subsidized strawberries. Farmers getting the subsidy.
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1 hour ago, Gregmal said:
It’s hilarious the contradictions you see if you follow the whole poor/middle class anti immigration crowd who tend to be construction or farm workers. The GC who hates Mexicans and poor liberals who don’t pay taxes has Julio and Jose doing off the books labor at his sites and then on weekends unpermitted renovations on his primary home.
The great political lie is that the liberals of California are bringing them into the state, when the conservative and rural areas of the state have lured them here in the first place for picking strawberries.
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1 hour ago, Gregmal said:
At least most of the anti immigration people are farmers who don’t use Iphones lol
When have the farmers been against using undocumented labor?
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20 minutes ago, Gregmal said:
So on one end we virtue signal about China while typing on our iPhones. We propose bringing jobs back home. Acknowledged is that costs will go up but we re virtuous so it’s ok. Then the Fed mistakes this all for some weird side effect of inflation and others say it’s because of “money printing”. Seems like everyone is just chasing their tails into a self inflicted recession.
Anti-immigration at the same time. So there's that. Anti-globalism and anti-immigration all during the tightest labor market in at least my lifetime and during the wave of boomer retirements to boot.
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2 hours ago, Gregmal said:
Why is bringing labor back on shore creating higher wages?
There are already help wanted signs everywhere so it becomes a bidding war for labor. Then there is a wage price spiral. Businesses can't just keep raising their labor costs without raising prices to maintain profitability.
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Regarding this anti-globalization political trend in the US. How does this not drive prices for everything higher in the midst of a labor shortage? I should think in our present situation with tight labor we should be trying to offshore things to free up labor for where it's needed elsewhere in the economy. The anti-globalists want something that only makes it worse.
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On Sunday I replaced the engine mounts and transmission mounts on my daughter's 2008 BMW 328i. Saved over $800 in labor costs (which is "after tax $800").
Wasn't that hard really. To get this done I bought an engine support bar from Harbor Freight for $85 and used it to lift the engine up -- then the mounts were easily swapped out from underneath.
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2 hours ago, crs223 said:
Probably a blessing in disguise. i wonder why the engineer didn’t buy? FYI the engineer is probably happy to pay extra for quality top-notch landlording (and for all other services).
He already owns a $3m house in San Jose that's only 1,400 sqft, with their laundry facilities on the outside of the home. He is renting out his San Jose home for $7,000 and moving out here to be closer to family. They have 3 little kids.
My house is 3x that size with a pool and they're paying me a little less than they're taking in... so they're quite happy. Until they get here and realize that the Bay Area is a much better place to live. Shhhh....
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17 minutes ago, Gregmal said:
That’s the one you were looking to sell?
Yes, the bottom has fallen out of the market here.
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10 hours ago, Dinar said:
No need to pay a Google or FB or MSFT engineer 500K per annum any more.
Don't say that! I just rented my house to an Apple engineer making 500k.
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1 hour ago, Gregmal said:
For instance BAC, wildly heralded as a great inflation play, beneficiary of rising rates, researched here for years as the poster boy of what you want to own in an inflationary environment, lost almost 1/3 of its value into the teeth of inflation? Doesn’t add up.
If market is down... MSGE down much more than market.
Market up?... MSGE up much more than market.
I know you were talking about BAC... but thinking should apply to hard assets too. Is it "beta will be beta"?
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1 hour ago, changegonnacome said:
As I've said before an economy printing 6% inflation is one where ALMOST everybody is losing their job just slowly via diminished purchasing power.
However, people who previously had excess income to save can now cut that rate of savings to free up purchasing power.
On the surface this may seem like it will hurt them down the road, but if they have sizable mortgage debt being devalued they may in fact be coming out ahead.
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16 minutes ago, Gregmal said:
The notion that higher wages = inflation is academic and unsubstantiated.
Isn't it driven by the line of thought that you can charge what the market can bear?
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1 minute ago, MMM20 said:
How big could you make something like that as a % of net worth, or however you think about it?
It was all of my investable cash at the time, taxable and IRA combined. I was only 33 and I could replenish any losses with savings.
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And there was not a put/call parity -- the calls were cheap relative to the puts and I believe it was because of the massive borrowing costs of the stock as interest in shorting the stock had increased with speculation over the assumed-to-be-busy 2006 hurricane season.
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6 minutes ago, MMM20 said:
More interesting to make 3-5x (IMHO) on a massive low impairment risk position anyway.
It was fairly low impairment risk. The stock was already compressed heading into the summer of 2006 and there was little decay risk to hold it for 3-4 months when it did not expire until January 2008. The game was to see how the summer 2006 hurricane season played out.
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15 hours ago, Blugolds11 said:
I run WIX filters, and they can be had for around $6 if you look online, I buy mine in packs of 5. Other good filers are Mobil and NAPA Gold.
A pack of 12 NAPA Gold 7060 filters goes for $56.82 on Amazon. After the 5% Amazon Visa discount the filters are only $4.50 a piece. There is a claim that they are identical to WIX: https://www.fleetfilter.com/comparison-wixLD-filter.html
So that's $27.38 for the entire job using the 6 quarts of Kirkland full synthetic oil.
I bet it's approximately $80 in savings by doing this oil change myself after sales taxes are factored in. Comparable to about $120 in pre-tax income saved.
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13 hours ago, Blugolds11 said:
$25 for 6 quarts 5w-30 synthetic, Kirkland brand has been proven in tests/comparison to be on par with Mobile 1…its good stuff.
I shopped at Costco today and they had this exact oil in the store except as a two-pack of 5 quart containers for $38.13.
That's $22.88 for 6 quarts, an additional savings of 8.5%.
Where Does the Global Economy Go From Here?
in General Discussion
Posted
So if you are the Fed, does it make your job easier to see a stronger dollar? Or does it necessitate ever higher rates to offset this boon to consumer purchasing power?